A Southwest Airlines plane flies above other Southwest Airlines planes as it takes off from Hollywood Burbank Airport in Burbank, California, on July 25, 2024.
Mario Tama | Getty Images
Southwest Airlines Executive chairman and former chief executive Gary Kelly will retire next year, the airline said on Tuesday, announcing a board reshuffle, a move that comes as the airline faces pressure Learn about the changes at activist investor Elliott Management.
“It’s time for change. It’s time to shake things up, not just stir things up a bit,” Kelly said in a statement. letter to shareholders. “Wisdom is knowing what to change and what not to change.”
Kelly has been with Southwest for nearly four decades and has served as chairman since the 2008 retirement of the airline’s co-founder, Herb Kelleher. , Elliott has been calling for leadership changes at Southwest.
Eliot June Reveals nearly $2 billion stake At Southwest Airlines, it is seeking to oust leadership, including Chief Executive Bob Jordan, who has also worked at the airline for nearly four decades. The company said Southwest “underperformed” under their leadership.
Kelly said in a statement on Tuesday that Southwest’s board and leadership “unanimously support Bob Jordan as CEO.”
Six Southwest board members will retire in November, and the company will “appoint four new independent directors in the near future, including up to three candidates with appropriate consideration for Elliott,” Kelly said.
The activist investor last week passed the 10% threshold needed to call a special meeting. Elliott did not immediately respond to a request for comment. Elliott has previously campaigned at companies including AT&T, Salesforce and Texas Instruments, but had never publicly pushed for change at an airline before.
Southwest has also brought in outside experts, including Bob Fornaro, the former CEO of Spirit Airlines, which Southwest acquired, and AirTran.
The airline has been struggling due to oversupply in the U.S. domestic market, rising costs and delays in aircraft deliveries from sole supplier Boeing Co.
Southwest has resisted for years the changes to its simple business model that transformed the U.S. airline industry and generated decades of near-constant profits that helped it build an investment-grade balance sheet.
But in July, it announced it would Provides extra legroom The elimination of the open-seating policy on its aircraft is the biggest change in its more than 50 years of flying. It also plans to offer overnight or “red-eye” flights next year.
Southwest is scheduled to hold an investor day in Dallas on Sept. 26 to expand on these and other measures.
